ProLogis is to extend its global presence to the Middle East after agreeing a 50:50 partnership with Bahrain-based investment company Arcapita aimed at developing $1bn (£505m) of warehouse space.
In an announcement made this morning, ProLogis said it would purchase, finance, develop and manage warehouses in Saudi Arabia, Kuwait, Bahrain, Oman and Qatar. It aims to start development on the first site, likely to be in Saudi Arabia, during the second half of 2008.
‘Saudi Arabia will be the starting point for ProLogis Middle East due to its strategic location, land availability and large population base,’ said Jeff Schwartz, chairman and chief executive officer of ProLogis. ‘Our experience in Dubai has given us a better understanding of the logistics property dynamics in the Gulf Cooperation Council region, where we believe local and multinational companies will increasingly demand modern distribution centres to serve the region's growing needs.’
He said: ‘We plan to leverage our first-mover advantage and existing customer relationships to create a logistics warehouse platform and fill a previously underserved market with quality warehouse space.’
Arcapita has worked with ProLogis previously in the US in a series of property funds.
Atif Abdulmalik, chief executive officer of Arcapita, said: ‘The Middle East currently has a shortfall in the supply of modern, institutional-quality warehouses. Given steadily rising gross domestic product regionally, leading to increased demand amongst consumers, we believe the demand for high-quality distribution facilities will continue to grow rapidly and that ProLogis has the experience and global expertise to satisfy this market.
'The creation of this pan-Gulf Corporation Council platform represents an appealing investment proposition for our investors.’